Geopolitics, oil and a fragile Fed put Bitcoin's bull month to the test 🪙

July opened with renewed macroeconomic stress after the U.S.-Iran ceasefire collapsed on July 8, pushing Bitcoin back toward $62,000 and liquidating roughly $300 million in long positions as the headlines broke. Oil climbed more than 4% on the same session, reclaiming the $75/barrel level for the first time since mid-June, while U.S. President Donald Trump said Iran is open to another round of negotiations. On Polymarket, the implied probability of oil trading above $80/barrel this month jumped from 13% to 65%, reflecting rising bets on further escalation and tighter energy supply. The repricing is feeding through to U.S. rate expectations: according to FedWatch, the odds of a hike at the upcoming FOMC meeting climbed to 29.4%, the highest pricing in over a month.

The shift has direct implications for risk assets. On-chain data shows that 50% of the BTC supply is now underwater, marking the steepest such reading in months, leaving the market more exposed to any further shock. Historically, July has been a constructive month for both Bitcoin and gold. According to the Kobeissi Letter, gold has averaged a 1.5% gain in July over the past 20 years, making it its second-strongest month of the year, while Bitcoin has posted July returns of 20% in 2018 and 17% in 2022 even during weaker cycles.

With both assets entering a seasonally strong window, the BTC/XAU ratio is back at the center of attention. The ratio is already up more than 4.5% this month, indicating that $BTC continues to outperform gold despite the return of macro volatility and the renewed rate-hike pricing. The key variable heading into the back half of July is whether that relative strength holds or whether capital rotates back into gold as the preferred hedge. With oil, rates and geopolitics all moving in the same direction, the BTC/XAU ratio is once again the cleanest read on where the next marginal dollar is going.